Businesses that invest in equipment not in the PIC IT and Automation Equipment List (232KB) but which serve to automate or mechanise their business processes and enhance productivity may apply to IRAS to have their equipment approved for PIC on a case-by-case basis.
Criteria for approval
IRAS will grant approval if the following criteria are met:
From Year of Assessment 2013
- The equipment automates or mechanises the work processes of the business;
- The equipment enhances productivity of the business (for example, in terms of reduced man-hours, more output or improved work processes); and
- If the equipment is a basic tool* used in the business,
(a) it has to increase productivity compared to existing equipment used in the business; or
(b) it has not been used in the business before.
For Years of Assessment 2011 and 2012
- The equipment automates the current core work processes of the business;
- The equipment enhances productivity of the principal trade of the business (for example, in terms of reduced man-hours, more output or improved work processes); and
- The equipment is not a basic tool* used in the business. If it is a basic tool,
(a) it must have more advanced/superior technology than existing automation equipment used in performing a similar function in the business; or
(b) no other automation equipment performing a similar function has been used in the business before.
* A basic tool is one which is necessary for carrying out the trade or business, and is commonly used in the industry. Examples of basic tools used in the laundry business include washing machines and dryers.
IRAS will evaluate each application based on the criteria described above. Approval is granted depending on the circumstances of the case.
How to apply
Businesses seeking case-by-case approval have to submit the following form to IRAS:
- From Year of Assessment 2013: Application for Approval of Equipment for PIC form (44KB).
This application has to be submitted to IRAS two months before the income tax return filing due date or earlier.
The liberalisation of the PIC scheme was introduced in the Budget announcement on 25 Feb 2013, just over a month before the income tax filing due date for individuals on 15 Apr 2013. To allow businesses more time to file their PIC claims, IRAS is prepared to accept both appeals and new applications of case-by-case approval for YA 2013 by sole-proprietorships and partnerships as long as these are received by IRAS by 15 May 2013 (i.e. within 1 month after the 15 Apr 2013 deadline).
- For Years of Assessment 2011 and 2012: Application for Approval of Equipment for PIC form (44KB).
What to note when applying for case-by-case approval
- Businesses that use the equipment for their trade or business can apply for case-by-case approval, with their assessment of meeting the criteria. Vendors of the equipment should not make the application.
- IRAS will process the application within three weeks of receiving the application form. Submission must be complete (in full) at the time of application.
- Please do not apply for the cash payout or claim PIC deductions/allowances in your income tax return until approval has been granted.